Justia U.S. 8th Circuit Court of Appeals Opinion Summaries

Daniel attended a birthday party for a St. Louis County police officer at Gannon's tavern, as an invited guest. Following a confrontation between Lammert and another in the parking lot, Lammert hit Daniel, then drove his vehicle out to the street, running over Daniel's body. Daniel died from complications due to the injuries. Lammert turned himself into the police and pleaded guilty to manslaughter and leaving-the-scene charges, claiming that he thought Daniel was out of the way. In state court premises liability and dram shop claims against Gannon's, its liquor liability insurer defended the dram shop claims, but the general commercial liability insurer, Atain, refused to defend and declined to participate in mediation. Gannon's settled, assigned its claims against Atain, and agreed to a $2 million consent judgment on the premises liability action. The estate sued Atain, alleging equitable garnishment and vexatious failure to defend and indemnify. Atain cited an exclusion precluding coverage for injuries caused by automobiles and an assault and battery exclusion. The Eighth Circuit affirmed summary judgment in favor of the estate on the equitable garnishment claim, finding that the exclusions did not apply, but granted Atain summary judgment the vexatious-refusal-to-defend claim, finding that the exclusions arguably could have applied and coverage was a close call. View "Minden v. Atain Specialty Ins. Co." on Justia Law

Zup’s owned a strip mall in Babbitt, Minnesota, where it operated a supermarket and rented space to other businesses. When the strip mall burned down in 2011, Zup’s lost income from its supermarket as well as rent from its tenants. Zup’s had two relevant insurance policies, one from Security National and one from West Bend. Zup’s sought payment from Security for the lost supermarket income and payment from West Bend for the lost rent. Security learned of the West Bend policy and concluded that West Bend also had insured and was primarily liable for the lost supermarket income. The district court determined that West Bend was not liable for lost supermarket income. The Eighth Circuit affirmed. The West Bend policy did not mention supermarkets or charge supermarket-specific premiums. The phrase “lessor’s risk only” appeared on the declarations page. Because West Bend’s policy was secondary to Security’s, West Bend need pay only if Security National’s coverage was exhausted. View "Zup's of Babbitt-Aurora, Inc. v. West Bend Mut. Ins. Co." on Justia Law

Weitz contracted with Hyatt to build an Aventura, Florida assisted-living facility, which was completed in 2003. Hyatt obtained post-construction insurance from defendants. Weitz was neither a party nor a third-party-beneficiary. The policies exclude faulty workmanship and mold, except to the extent that covered loss results from the faulty workmanship, such as business interruption losses. The construction was defective. Hyatt notified defendants of a $11 million loss involving moisture and mold at the care center, settled that claim for $750,000, and released defendants from claims relating to the care center. Hyatt next discovered moisture, mold, and cracked stucco at the residential towers. Hyatt gave defendants notice, but bypassed inevitable defenses based upon policy exclusions, and sued Weitz. Weitz sued its subcontractors and its own construction contract liability insurers. Weitz settled with Hyatt for $53 million and was indemnified by its insurers for $55,799,684.69. Weitz sued, claiming coverage under defendants’ policies, based on equitable subrogation or unjust enrichment. The Eighth Circuit affirmed dismissal, recognizing that Weitz, as subrogee, was subject to any defense Hyatt would have faced, and that Hyatt had discharged defendants from liability; that suit was barred by the contractual period of limitations; that Weitz was barred from suing for damage to the plaza because Hyatt did not give defendants notice of that damage; and that Weitz had already collected several million more than it paid. View "Weitz Co. v. Lexington Ins. Co." on Justia Law

In a 2008 collision on I-40 in West Memphis, McHone, driving a car, was struck by a tractor trailer driven by Whirley. McHone’s State Farm policy included coverage for uninsured motor vehicles with bodily injury limits of $100,000 per person. The trucking company defendants were insured by Gramercy. McHone’s medical bills exceeded $400,000; her physicians estimate future medical care will exceed an additional $400,000. Before trial, Gramercy was placed into Rehabilitation with an automatic stay. In 2013, McHone’s counsel notified State Farm of the problems with Gramercy and demanded $100,000 uninsured motorist benefits. State Farm asserted that no coverage existed. McHone settled her claims against Whirley and the truck’s owner for $300,000 to avoid the claim process with the State Guarantee Fund. Gramercy was liquidated. State Farm again refused to pay uninsured motorist benefits. The district court ruled in favor of State Farm as being entitled to a credit for the settlement proceeds regardless of the date of insolvency. The Eighth Circuit affirmed. State Farm is entitled to a credit for the money McHone received from her settlement. McHone’s argument that the credit is not applicable because the payment was made by the receivership rather than by Gramercy itself is not supported by the policy language nor Tennessee law. View "McHone v. State Farm Mut. Ins. Co." on Justia Law

Jackson claimed to be at work when her house burned. Little Rock Fire Department investigator Baker determined the fire was started by human intervention. Baker detected accelerants in the house; the fire's points of origin were inconsistent with accidental causes. Baker initially believed that Jackson might have been the victim of a hate crime, because he discovered racially derogative graffiti in her garage, but there were no signs of forced entry and the house was largely empty of personal items, food, or furniture. Baker claims that Jackson stated that she was the only person with access to the house and that she was not missing any property. Baker obtained a search warrant for her cell phone records, which indicated that Henson, Jackson's coworker, attempted to call Jackson three times during the period at issue. Henson denied calling Jackson. Baker concluded that Henson may have burned Jackson's home at her request. No criminal charges were filed. Allstate's investigative unit concluded that Henson had burned Jackson's home, noting that Jackson was subject to a divorce decree that ordered her to sell her house and that she tried to sell for several years,. Allstate denied Jackson's insurance claim based on Intentional Acts and Material Misrepresentations Exclusions. A jury found in favor of Allstate. The Eighth Circuit affirmed, rejecting procedural challenges and a challenge to the sufficiency of the evidence. View "Jackson v. Allstate Ins. Co." on Justia Law

The Patient Protection and Affordable Care Act (ACA) creates “navigators,” to assist consumers in purchasing health insurance from exchanges, 42 U.S.C. 18031(i), and authorizes the Department of Health and Human Services to establish standards for navigators and exchanges. HHS regulations recognize: federal navigators, certified application counselors (CACs), and non-navigator assistance personnel. They conduct many of the same activities, but federal navigators have more extensive duties. Plaintiffs, federally-certified counselor designated organizations, employ CACs. The federal government established a Missouri Federally Facilitated Exchange. The Health Insurance Marketplace Innovation Act (HIMIA), Mo. Rev. Stat. 376.2000, regulates “person[s] that, for compensation, provide[] information or services in connection with eligibility, enrollment, or program specifications of any health benefit exchange.” Regulatory provisions dictate what state navigators and cannot do. Plaintiffs challenged: the definition of state navigators; three substantive provisions; and penalty provisions. The district court granted a preliminary injunction, finding that the ACA preempted HIMIA. The Eighth Circuit affirmed in part, finding likelihood of success in challenges to HIMIA requirements that: state navigators refrain from providing information about health insurance plans not offered by the exchange; that in some circumstances, the navigator must advise consultation with a licensed insurance producer regarding private coverage; and that CACs provide information about different health insurance plans and clarify the distinctions. The court vacated the preliminary injunction, holding that ACA does not entirely preempt HIMIA. View "St. Louis Effort For AIDS v. Huff" on Justia Law

Retired seamstress, Joseph, never had annual household income exceeding $40,000; her condominium, worth $169,990, was foreclosure. Joseph was born in Haiti. She did not speak English well. Jean referred Joseph to the Diverse insurance agency for a fee. In 2008, Diverse applied for a $10 million life-insurance policy on Joseph’s life to PHL. The application falsely stated Joseph’s net worth was $11,906,000 and her income was $497,000. The application listed a 2008 Irrevocable Trust as the proposed beneficiary and owner. Joseph signed an agreement establishing the Trust and appointed BNC as the trustee and Jean as the trust protector. Joseph did not know of the misrepresentations and likely signed blank documents. The Trust financed the premiums through a loan from PFG. In 2010, Jean directed BNC to surrender the Policy to PFG in satisfaction of the loan obligations. PHL sought to rescind the Policy for fraud. After Joseph died in 2011, the new policy owner claimed the proceeds. The district court granted rescission and held that PHL could keep the premium. The Eighth Circuit affirmed, rejecting arguments that PHL could not rescind the Policy because its own agent completed the application and that PHL was estopped from rescinding the Policy because it had reason to know of the misrepresentations. View "PHL Variable Ins. Co. v. Midas Life Settlements LLC" on Justia Law

Smart Candle sells light-emitting diode flameless candles and commercial lighting systems internationally. Excell sued under the LanhamAct alleging that Smart Candle’s use of the trade name and trademark “Smart Candle” infringed rights that Excell had over use of that name and trademark. Selective insured Smart Candle during the period in which the Excell suit commenced, but disclaimed coverage, based on exclusion any injury “arising out of the infringement of copyright, patent, trademark, trade secret or other intellectual property rights” that “does not apply to infringement in your ‘advertisement’ of copyright, trade dress or slogan.” Excell won its suit. Selective sought a declaration that it owed no duty to defend or indemnify. Smart Candle counterclaimed breach of contract, arguing that Selective had not conducted “reasonable investigation of Excell’s Claims” including “a review of Smart Candle’s website . . . or any of Smart Candle’s advertising before denying coverage.” The district court granted Selective summary judgment. The Eighth Circuit affirmed, agreeing that no reasonable jury would conclude that Excell was suing for slogan infringement and that Selective had no duty to investigate “beyond the four corners of the complaint” to determine whether other facts could trigger Selective’s duty to defend or indemnify. View "Selective Ins. Co. v. Smart Candle, LLC" on Justia Law

In March, 2004, Harris closed on a home with a mortgage loan from MPI. To be licensed in Missouri, MPI, as obligor and principal, bought two “Missouri Residential Mortgage Brokers Bonds” from Hartford, its surety, RSMo 443.849. The surety bonds stated that the two parties were “jointly and severally” bound for payment to any person “who may have a claim against” MPI. Harris sued MPI for violating the Missouri Merchandising Practices Act, sections 407.010-.1500. Harris obtained a judgment for compensatory damages, punitive damages, and attorney fees. Hartford had notice of the suit against MPI, but chose not to intervene. As surety, Hartford failed to pay the judgment amount due on the bonds. In 2012, Harris sued Hartford for breach of contract, vexatious refusal to pay, and equitable garnishment. The district court granted Hartford summary judgment, rejecting the 10-year statute of limitations in RSMo 516.110(1) in favor of the three-year statute in section 516.130(2). The Eighth Circuit reversed. Harris’s claim against Hartford sought the amount due on the bonds, not a penalty. View "Harris v. Hartford Fire Ins. Co." on Justia Law

In 2007, while operating a truck, Yelder, an employee of Yelder-N-Son Trucking, collided with a Tri-National truck, causing extensive property damage. Tri-National filed a claim with its insurer, Harco, which paid $91,100 and retained a subrogation interest. Yelder was insured by Canal with an MCS-90 endorsement, mandated by the Motor Carrier Act of 1980, 94 Stat. 793. In 2010, Canal sought a declaratory judgment against the Yelder defendants and Harco. An Alabama court entered default judgment against the Yelder defendants only, stating Canal had no duty to defend or indemnify them under the Canal policy. The court made no declaration about whether the MCS-90 endorsement requires a tortfeasor’s insurer to compensate an injured party when the injured party has already been compensated by its own insurer. Tri-National then sued the Yelders in Missouri and obtained a $91,100 default judgment. Tri-National sought equitable garnishment against Canal, apparently on behalf of Harco. Canal removed the action to the federal district court, which granted Tri-National’s motion. The Eighth Circuit affirmed, holding that the MCS-90 does require such compensation. The circumstance of Tri-National carrying its own insurance did not absolve Canal of its obligations under the endorsement View "Tri-National, Inc. v. Canal Ins. Co." on Justia Law